Montenegro: New TPP Pljevlja 2 project is not profitable claim from NGOs

21. March 2016. / SEE Energy News

NGOs claim that the recent analysis for the construction of new coal TPP Pljevlja unit 2 showed that the investment is likely to be an introduction to the allocation of state aid, which would be contrary to the strict requirements of the European Union (EU) when it comes to granting aid to the operation of coal power plants.

Analysis of the Research Center MANS is a result of months of collecting official information from a range of national and local institutions, as well as the Montenegrin Elektroprivreda (EPCG), based on the Law on free access to information and their proccessing,” the statement said.

Network for Affirmation of NGO Sector (MANS) submitted the analysis of the project of construction of the second unit of the thermal power plant (TE) Pljevlja to all MP clubs in the Parliament, which shows that the government’s investment is economically unprofitable.

From MANS they stated that the analysis showed that the investment is likely to be an introduction to the allocation of state aid, which would be contrary to the strict requirements of the European Union (EU) when it comes to granting aid to the operation of coal power plants.

“Analysis of the Research Center MANS is a result of months of collecting official information from a range of national and local institutions, as well as the Montenegrin Elektroprivreda (EPCG), based on the Law on free access to information and their proccessing,” the statement said.

From MANS They said that during this period they gathered a considerable part of the documentation.

“The key document on which the whole project is based is a feasibility study on the feasibility of the construction of the second block, which was done by the Slovenian company Echotec for the purpose of EPCG in 2012. This document is still clasified and state energy company refuses to publish it,” said the representatives of MANS.

They said that the Montenegrin Government, a few years ago, started the project of the second block in Pljevlja on the pretext that the new unit should be built due to the deficit of electricity in the country and for further economic development of Montenegro.

“However, it has not been confirmed that there is a deficit of electricity, neither did the government present the economic benefits that citizens can have from the construction of a new ‘dirty source of’ energy ‘, MANS representatives said.

Analysis of the Research Center MANS, as they put it, shows that the actual investment cost of the project will exceed one billion euros, not counting the cost of health and environmental protection which was estimated at 2.5 billion euro by Greenpeace in mid-2013 for 40 years of the operation of the second block .

“This means that the total cost of the new government’s project could amount to a whopping 3.5 billion,” said the representatives of MANS.

As they claim the government based the entire investment on incorrect information about the actual commercial coal reserves in the so-called narrow Pljevlja basin from which the coal for the operation the new unit should come from.

“MANS data showed that there is cost-effective coal only for 20 years of operation of the second block, and not for 40 years as it is necessary for the investment to pay off,” the statement said.

In addition, they added, the government based the project on manipulative data regarding the actual price of coal, which is why it projected the production cost of electricity unrealistically.

“According to the current prices of electricity, the second block would annually produce millions in losses, so the likely scenario is that the Government would maintain the project through the allocation of state subsidies,” they said in the MANS.

Possible government subsidies would be, as warned by these non-governmental organizations (NGOs) opposed the strict requirements of the EU when it comes to operation of coal power plants.

“In connection to this it should be pointed out that the world leaders at the Summit on Climate Change, held in Paris in December last year, announced the start of a global effort to reduce the use of fossil fuels and the closure of coal plants, but obviously that the government ignores these recommendations” they said in the MANS.

Last week MANS, along with Green Home, sent an official request to the president of the Committee for Economy and Finance, Aleksandar Damjanovic, to schedule a meeting of this parliamentary body on the subject of the second block, in order to have a control hearing of Prime Minister Milo Djukanovic, Deputy Prime Minister Vujica Lazovic and the Ministers of finance and Economy Radoje Zugic and Vladimir Kavaric.

“For all these reasons, we believe that members of the Assembly, which has a controlling role over the work of the Government, must have detailed information about the currently most valuable investment in the energy sector of Montenegro”, concluded MANS, transmits serbia-energy.eu